The resource every higher ed donor should know about

Philanthropy Daily

September 26, 2017
by Travis LaCouter

Bloated budgets, threadbare curricula, activist administrators—the litany of sins attributable to the modern American university is as familiar as it is discouraging.

One of the broad structural problems underlying these more-discussed abuses is the fast and easy approach many schools take to donor intent. In September of last year, for instance, I wrote about the University of New Hampshire’s decision to use most of a surprise $4 million bequest from a frugal librarian towards a giant scoreboard in the new football stadium. This was allowed to happen because the librarian hadn’t stipulated what UNH was and was not allowed to use the money for (aside from $100,000 towards the library where he had worked for nearly fifty years).

Donors who want to ensure their dollars wind up supporting a specific program or department have to be more careful. This can seem a tall order—navigating the complicated world of higher education philanthropy requires insider knowledge, specialized skills, and institutional intelligence that many causal donors simply don’t have.

Enter the Fund for Academic Renewal (FAR), a program of the American Council of Trustees and Alumni (ACTA) charged with “assist[ing] donors in designing gifts—both large and small—that can be tailored to their individual interests and financial circumstances.” Though FAR has existed within ACTA for several decades, a recent $4.5 million dollar grant from the Diana Davis Spencer Foundation has allowed the Fund to expand its footprint.

And expand they have. Not least of all due to the diligent leadership of Dr. Jacqueline Pfeffer Merrill, who brings over a decade of nonprofit and higher-education experience to bear on her position as FAR’s executive director, the Fund now offers a range of donor-facing services that help to remove much of the guesswork involved in university gift-making.

FAR is not a donor-advised fund but can act as one in certain cases; it also engages the leading nonprofit law firm Arnold & Porter Kaye Scholer LLP to help advise donors on regulatory, transactional, and operational matters.

“We are truly trying to assist college donors make an enduring impact with their gifts,” Pfeffer Merrill told me when I spoke to her recently. Key to that mission is field-specific expertise, which FAR marshals in spades.

Donors, for their part, are all too happy to take advantage of these services.

Take Angelo Pizzagalli, one of Vermont’s most prominent business leaders, who recently engaged FAR to help establish the Pizzagalli Chair of Free Enterprise at the Grossman School of Business at the University of Vermont. Pizzagalli had been generous to his alma mater previously but with this gift he wanted to create a lasting legacy at the school, one that would emphasize and explain the role of free enterprise in an open society.

“I appreciate the assistance of the Fund for Academic Renewal in structuring the gift and my agreement with UVM to achieve that result,” Pizzagalli told ACTA recently; “FAR’s guidance led us to insert provisions in the gift agreement that we would never have thought of. These provisions will ensure that my objectives for the gift will be honored by the University for many years to come.”

And on their end, colleges and universities are often grateful to let FAR come in and serve as a middle-man between themselves and potential donors.

One of the Fund’s tactics is to pool together small- to mid-sized gifts from several donors and negotiate an agreement directly with the school on the donor pool’s behalf. They’ve even established five Special Purpose Funds devoted specifically to evergreen programs and foundational subject-areas, including ‘American History, Government, and Statesmanship,’ ‘Economic Literacy,’ and one particularly timely fund devoted to promoting open discourse and diverse views on college campuses.

These pooling efforts amplify donors’ individual gifts, save college fundraisers’ time and energy, and even prompt gifts that might not have been made otherwise. In these cases, Pfeffer Merrill says, “we’re bringing money to the table,” and the schools in question recognize that these donors are more likely to give again in the future.

But there’s a broader task afoot, too.

As the Pizzagalli gift shows, protecting donor intent is the key to ensuring gifts have some broader vision behind them. The ongoing crisis of higher education stems from a loss of just such a vision on the part of universities and colleges themselves.

The coherence of a liberal arts education in particular seems less obvious than ever, even at America’s leading colleges. FAR recognizes this disconnect, and thus recognizes the potential for motivated donors to have a real hand in shaping—or better, restoring—college identities.

“Writing a check to a college or university’s annual fund merely preserves the status quo and encourages more of the same weaknesses that erode confidence in American higher education,” says Pfeffer Merrill. FAR aims to be transformative, to “enable colleges and universities to live up to their highest ideals.”

This commitment to mission is evident in FAR’s business model: It offers its services to donors pro bono, allowing 100% of their gift amount to get to where it’s meant to go.

A recent survey commissioned by FAR with the research firm GfK found that 81% of alumni agree that colleges and universities should require classes in fundamental subject areas; half of those polled thought colleges and universities were doing only a fair or poor job ensuring that students are exposed to “a wide range of viewpoints across the ideological spectrum;” and nearly 90% of respondents agreed that “college is becoming financially unaffordable for the middle class.”

FAR seeks to offer a cause for optimism in the midst of these discouraging trends. By shepherding money to worthy programs and scholarships the Fund is helping to reshape the landscape of higher education philanthropy.

Indeed, Pfeffer Merrill is hopeful about the future: “$41 billion went to higher education philanthropy last year,” she tells me, “and that means donors have a lot of clout if they choose to use it.”

If they do choose to exercise that clout, they could do a lot worse than look to FAR for help.